<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: FEBRUARY 28, 1999
Commission File Number 0-13851
NITCHES, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 95-2848021
(State of Incorporation) (I.R.S. Employer Identification No.)
10280 CAMINO SANTA FE, SAN DIEGO, CALIFORNIA 92121
(Address of principal executive offices)
Registrant's telephone number: (619) 625-2633
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NAME OF EACH
TITLE OF EACH CLASS EXCHANGE ON WHICH REGISTERED
------------------- ----------------------------
Common Stock, no par value NASDAQ SmallCap Market
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
As of April 5,1999, 1,121,168 shares of the Registrant's common stock were
outstanding.
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
NITCHES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
<TABLE>
<CAPTION>
February 28, August 31,
1999 1998
------------ -----------
(Unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 180,000 $ 1,338,000
Receivables:
Trade accounts, less allowances 664,000 5,306,000
Income taxes receivable -- 5,000
Due from affiliates and employees 113,000 124,000
----------- -----------
777,000 5,435,000
Inventories, net 6,435,000 5,340,000
Deferred income taxes 323,000 323,000
Other current assets 891,000 159,000
----------- -----------
Total current assets 8,606,000 12,595,000
Furniture, fixtures and equipment, net 94,000 137,000
Deferred income taxes 987,000 987,000
Other assets 63,000 63,000
----------- -----------
$ 9,750,000 $13,782,000
=========== ===========
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 2,825,000 $ 3,211,000
Income tax payable 308,000 --
----------- -----------
Total current liabilities 3,133,000 3,211,000
Shareholder's equity:
Common stock, no par value,
50,000,000 shares authorized; issued and
outstanding (1,121,168 at February 28,
1999 and 2,012,030 at August 31, 1998) 1,308,000 1,308,000
Retained earnings 5,309,000 9,263,000
----------- -----------
Total shareholders' equity 6,617,000 10,571,000
----------- -----------
$ 9,750,000 $13,782,000
=========== ===========
</TABLE>
2
<PAGE> 3
NITCHES, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Second quarter ended Six months ended
--------------------------------- ---------------------------------
February 28, February 28, February 28, February 28,
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net sales $ 5,431,000 $ 5,959,000 $ 15,749,000 $ 15,257,000
Cost of goods sold 3,969,000 4,709,000 11,776,000 11,542,000
------------ ------------ ------------ ------------
Gross profit 1,462,000 1,250,000 3,973,000 3,715,000
Expenses:
Selling, general and administrative 1,441,000 2,058,000 3,372,000 4,488,000
------------ ------------ ------------ ------------
Income (loss) from operations 21,000 (808,000) 601,000 (773,000)
Interest income 42,000 96,000 68,000 143,000
------------ ------------ ------------ ------------
Income (loss) before income taxes 63,000 (712,000) 669,000 (630,000)
Provision for income taxes 25,000 (278,000) 261,000 (246,000)
------------ ------------ ------------ ------------
Net income (loss) 38,000 $ (434,000) 408,000 $ (384,000)
============ ============ ============ ============
Earnings (loss) per basic share .03 $ (.20) .30 $ (.17)
============ ============ ============ ============
Earnings (loss) per diluted share .03 $ (.19) .30 $ (.17)
============ ============ ============ ============
Weighted average number of basic shares
Outstanding 1,121,228 2,146,742 1,372,563 2,245,916
============ ============ ============ ============
Weighted average number of diluted shares
Outstanding 1,121,228 2,231,260 1,372,563 2,324,158
============ ============ ============ ============
</TABLE>
3
<PAGE> 4
NITCHES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Six months ended February 28,
--------------------------------
1999 1998
----------- -----------
<S> <C> <C>
Net cash used by operating activities $(1,239,000) $(1,006,000)
Cash flows from investing activities:
Capital expenditures (20,000) (35,000)
----------- -----------
Net cash used by investing activities (20,000) (35,000)
----------- -----------
Cash flows from financing activities:
Advances 4,463,000 1,216,000
Purchases and retirement of parent common stock (4,362,000) (1,045,000)
----------- -----------
Net cash provided by financing activities 101,000 171,000
----------- -----------
Net decrease in cash and cash equivalents (1,158,000) (870,000)
Cash and cash equivalents at beginning of period 1,338,000 955,000
----------- -----------
Cash and cash equivalents at end of period 180,000 $ 85,000
=========== ===========
Supplemental disclosures of cash flow information:
Cash paid during the period:
Interest $ 154,000 $ 72,000
Income taxes $ 23,000 $ 51,000
</TABLE>
4
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NITCHES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
1. Nitches, Inc. (the "Company") is a wholesale importer and distributor
primarily of women's clothing manufactured to its specifications and distributed
in the United States under Company brand labels and private retailer labels.
2. Condensed Financial Statements:
The consolidated balance sheet as of February 28,1999, and the
consolidated statements of operations and the condensed consolidated cash flow
statements for the periods ended February 28, 1999 and 1998 have been prepared
by the Company without audit. In the opinion of management, all adjustments
(which include only normal recurring adjustments) necessary to present fairly
the consolidated financial position, results of operations and cash flows at
February 28,1999 and for all periods presented have been made. The results of
operations for the periods ended February 28, 1999 and 1998 are not necessarily
indicative of the operating results for the full years.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these financial
statements be read in conjunction with the financial statements and notes
thereto included in the Company's August 31, 1998 annual report.
Certain account balances as of August 31, 1998 have been reclassified to
conform to the February 28, 1999 condensed financial statement presentation.
3. Earnings Per share:
At February 28, 1999, there were no stock options outstanding and
therefore no dilutive effect to the weighted average number of shares
outstanding.
4. Inventories:
<TABLE>
<CAPTION>
February 28, August 31,
1999 1998
----------- ----------
<S> <C> <C>
Fabric and Trims $ 256,000 $ 417,000
Finished Goods 6,179,000 4,923,000
---------- ----------
$6,435,000 $5,340,000
========== ==========
</TABLE>
5. Trade accounts:
Pursuant to the terms of an agreement between Nitches and a factor,
Nitches sells a majority of its trade accounts receivable to the factor on a
pre-approved, non-recourse basis. The Company may request advances in
anticipation of customer collections and open letters of credit through the
factor, all of which are collateralized by all of the Company's assets.
Outstanding advances are charged interest at the factor's prime rate less one
half percent. Advances and contingent liabilities for irrevocable letters of
credit outstanding are as follows:
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<PAGE> 6
NITCHES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statement (continued)
5. Trade accounts (continued):
<TABLE>
<CAPTION>
February 28, August 31,
1999 1998
----------- -----------
<S> <C> <C>
Receivables assigned to factor:
Nonrecourse $ 4,952,000 $ 4,814,000
Recourse 495,000 707,000
Advances from factor (4,455,000) (276,000)
----------- -----------
Due from factor 992,000 5,245,000
Nonfactored accounts receivable 147,000 336,000
Allowance for customer credits and doubtful accounts (475,000) (275,000)
----------- -----------
$ 664,000 $ 5,306,000
=========== ===========
Contingent liabilities for irrevocable letters of credit $ 2,387,000 $ 6,313,000
=========== ===========
</TABLE>
The factoring agreement allows the Company to borrow up to $15,000,000,
limited by certain percentages of outstanding accounts receivable and finished
goods inventory owned by the Company. The President has provided a $1,000,000
personal guarantee in connection with the factoring arrangement.
6. Stock repurchase and related party transactions:
On October 21, 1998, the Company purchased and retired 1,050,426 shares of
its outstanding common stock for $4 per share in connection with a self tender
offer. Of those shares, 436,563 were purchased from officers and directors. The
total cost of the transaction to the Company was approximately $4.3 million.
Cash and cash equivalents, together with proceeds from borrowings under the new
factoring agreement, were used to purchase the tendered shares. The Company's
president subsequently purchased 331,748 shares from its chairman and a director
at the $4 per share tender price on November 19, 1998.
The Company rents a 30,000 square foot warehouse and office building
from Kuma Sport, Inc., which is 40% owned by a director of Nitches. The Company
pays rent of $15,000, on a month-to-month basis, which management believes is
consistent with the fair market value of the facility. Nitches is also
purchasing labor and administrative services from Kuma Sport on a monthly basis,
as needed, at fair market rates. The Company purchased labor and administrative
services from Kuma Sport, Inc. for approximately $168,000 in the second quarter
of fiscal 1999.
7. Operating segments:
The Company's products comprise a single operating segment. Sales are
made to a variety of customers throughout the United States. Sales to three
separate customers accounted for 25.5%, 18.1%, and 12.6%, respectively, of the
Company's net sales in the quarter ended February 28, 1999. These same customers
accounted for 18.2%, 16.3%, and 14.1%, respectively, of the Company's trade
receivable balance at February 28, 1999.
6
<PAGE> 7
NITCHES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statement (continued)
8. Contingency
Management has initiated a program to prepare the Company's computer
systems and applications for the year 2000. The Company has incurred internal
staff costs and other expenses related to infrastructure and facilities
enhancements necessary to prepare the systems for the year 2000. Certain
internal applications have already been modified and testing and conversion of
system applications has been completed. The Company is also continuing to assess
its vendors, customers and other third parties as to their year 2000 compliance.
7
<PAGE> 8
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
RESULTS OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 28, 1999 COMPARED TO THE SIX MONTHS ENDED FEBRUARY 28,
1998.
Net sales for the six months ended February 28, 1999 increased
approximately $.5 million (3.2%) as compared to the six months ended February
28, 1998. This increase is primarily attributable to the Company's increase in
private label sales in the sleepwear product line in the quarter ending November
30,1998 which accounted for over fifty percent of the sales for the six months
to its major customers.
Gross margins increased from 24.3% for the six months ended February 28,
1998 to 25.2% for the current six month period. The increase was the result of
the Company's product mix shifting to higher gross margin product such as
Western Wear in the quarter ending February 28, 1999. The Company's product mix
constantly changes to reflect customer mix, fashion trends and changing seasons.
Consequently, gross margins are likely to vary on a quarter-to-quarter basis and
in comparison to gross margins generated in the same period of prior fiscal
years.
Selling, general and administrative expenses decreased in dollar amount
from $4.5 million for the first six months of last year to $3.4 million for the
first six months of fiscal 1999, and decreased as a percent of net sales from
29.4% last year to 21.4% for the current period. The decrease in dollar amount
and decrease as a percent of net sales is a result of the Company's continued
efforts to decrease overhead.
THREE MONTHS ENDED FEBRUARY 28, 1999 COMPARED TO THE THREE MONTHS ENDED FEBRUARY
28, 1998.
Net sales for the second quarter of fiscal 1999 decreased approximately
$.5 million (8.9%) compared to the net sales for the same quarter last year.
Overall, sales decreased in the current quarter due to the shift of spring
private label sleepwear sales into March and April, closer to the actual retail
selling time of the product.
Gross margins increased from 21.0% for the three months ended February
28, 1998 to 26.9% for the current quarter. The increase is the result of the
Company's product mix shifting to higher gross margin product such as Western
Wear. The Company's product mix constantly changes to reflect customer mix,
fashion trends and changing seasons. Consequently, gross margins are likely to
vary on a quarter-to-quarter basis and in comparison to gross margins generated
in the same period of prior fiscal years.
Selling, general and administrative expenses decreased in dollar amount
from $2.1 million for the second quarter of last year to $1.4 million for the
second quarter of fiscal 1999, and decreased as a percent of net sales from
34.5% last year to 26.5% for the current quarter. The decrease in dollar amount
is a result of the Company's continued efforts to decrease overhead.
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital of $5.5 million at February 28,1999
decreased from the August 31, 1998 level of $9.4 million, while the Company's
current ratio decreased from 3.92:1 at August 31, 1998 to 2.75:1 at February 28,
1999. The principal reason for the decrease in working capital and in current
ratio was the Company's stock repurchases through its tender offer of
approximately $4.3 million which was completed in November 1998.
Effective October 1, 1998, the Company entered into new agreements
with Congress Talcott Corporation West ("Congress"), including a Discount
Factoring Agreement, Addendum to Discount Factoring Agreement, Trade Financing
Agreement, Inventory Security Agreement, Financial Covenant Agreement and
Agreement to Issue Letter of Credit Guaranties (collectively, the "Discount
Factoring Agreement"). The Company sells substantially all of its trade
receivables to Congress on a pre-approved, non-recourse basis. The Company
attempts to make the recourse shipments on a COD
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<PAGE> 9
basis or ensure that the customers' payments are backed by a commercial or
standby letter of credit issued by the customer's bank. The amount of the
Company's receivables which were recourse and were not made on a COD basis or
supported by commercial or standby letters of credit at February 28, 1999 was
approximately $495,000 of which approximately $55,000 has been collected through
March 19,1999.
Payment for nonrecourse factored receivables is made at the time
customers make payment to Congress or, if a customer is financially unable to
make payment, within approximately 180 days of the invoice due date. Under the
Discount Factoring Agreement, the Company can request advances in anticipation
of customer collections at Congress' prime rate (currently 7.75%) less one-half
percent, and open letters of credit through Congress. The amount of borrowings
by the Company, including a portion of outstanding letters of credit, are
limited to certain percentages of outstanding accounts receivable and finished
goods inventory owned by the Company. Borrowings are collateralized by all of
the assets of the Company as well as a $1 million guaranty of the Company's
president, Mr. Wyandt. At February 28, 1999, the Company had outstanding letters
of credit of approximately $2.4 million for the purchase of finished goods which
had been opened through the financial institution. Under the Discount Factoring
Agreement, the Company is required to maintain $5 million of net worth and $5
million of working capital. The Discount Factoring Agreement can be terminated
by Congress on 60-days prior written notice.
On November 18, 1998, the Company purchased and retired 1,050,426 shares
of its outstanding common stock for $4 per share in connection with a self
tender offer. The total cost of the transaction was approximately $4.3 million.
The funds for the transaction came from cash and cash equivalents of the Company
in addition to borrowings of approximately $3 million under the Discount
Factoring Agreement. Borrowings under the Discount Factoring Agreement are
expected to be repaid from cash flow from operations over the next 18 months.
The Company has an additional borrowing capacity of $12,000,000, limited by
certain percentages of outstanding accounts receivable and finished goods
inventory owned by the Company, under the Discount Factoring Agreement, which
management believes is adequate to meet working capital needs.
INVENTORY
In its ordinary course of operations, the Company generally makes some
sales below its normal selling prices or below cost. Based on prior experience,
management believes this will be true for some inventory held or acquired after
February 28,1999. The amount of such sales depends on several factors, including
general economic conditions, market conditions within the apparel industry, the
desirability of the styles held in inventory and competitive pressures from
other garment suppliers.
The Company's inventory increased from $5.3 million at August 31, 1998 to
$6.4 million at February 28, 1999. The Company has established an inventory
markdown reserve as of February 28, 1999, which management believes will be
sufficient for current inventory that is expected to be sold below cost in the
future. There can be no assurance that the Company will realize its expected
selling prices, or that the inventory markdown reserve will be adequate, for
items in inventory as of February 28, 1999 for which customer sales orders have
not yet been received.
BACKLOG
At February 28, 1999, the Company had unfilled customer orders of $13.4
million compared to $11.2 million of unfilled customer orders at February
28,1998, with such orders generally scheduled for delivery by July, 1999 and
July 1998, respectively. The increase in backlog is primarily attributable to
the increase in sales of private label sleepwear. These amounts include both
confirmed orders and unconfirmed orders which the Company believes, based on
industry practice and past experience, will be confirmed. While cancellations,
rejections and returns have generally not been material in the past, there can
be no assurance that cancellations, rejections and returns will not reduce the
amount of sales realized from the backlog of orders at February 28,1999.
IMPACT OF EXCHANGE RATES
While the Company purchases over 90% of its products from foreign
manufacturers, all of its purchases are denominated in United States dollars.
Because the Company's products are sold primarily in the United States, in
dollar denominated transactions, the Company does not engage in hedging or other
arbitrage to reduce currency risk. An increase in the value of the dollar versus
foreign currencies could enhance the Company's purchasing power for new purchase
orders and reduce its cost of goods sold. Conversely, a decrease in the value of
the dollar relative to
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<PAGE> 10
foreign currencies could result in an increase in the Company's cost of
manufacturing for new purchase orders and costs of goods sold.
IMPACT OF INFLATION AND DEFLATION
Management does not believe that inflation has had any material impact
upon the Company's revenues or income from operations to date. However,
continued deflation in women's clothing prices may put pressure on gross margins
for the balance of fiscal year 1999. The strong resistance on the part of the
consumer to increases in price and the increasing fabric and labor costs lead to
an increased cost of goods on a percentage basis.
YEAR 2000 ISSUE
The worldwide issue which has arisen regarding the arrival of the year
2000 is the result of computer programs being written using two digits rather
than four digits to define the applicable year. Many computer programs that have
time sensitive software may recognize a date using "00" as the year 1900 rather
than the year 2000. Furthermore, they may not recognize the year 2000 as a leap
year. If the Company did not ensure that these were corrected in its systems,
this could result in a system failure or miscalculations causing disruptions of
operations including a temporary inability to process transactions, send
invoices, or engage in similar normal business activities.
The Company also faces risk from the Year 2000 issues affecting its
suppliers, customers and service providers. This risk can stem from the general
issue of those entities' ability to conduct their business, as well as the
specific issue of communication and integration issued between the Company's
computer systems and those entities' systems. Manufacturers of clothing may be
experiencing power interruptions or the failure of computerized machinery or
machinery with embedded logic as a result of the Year 2000 issue. Management
believes that the risk associated with such problems can be remediated by moving
production to alternate suppliers who are not adversely affected, but there can
be no assurance of their availability or that the change will not result in an
interruption in service or an increase in cost resulting in reduced
profitability. The Company receives electronic purchase orders from certain
large customers. In the event that the system for delivering electronic purchase
orders failed, the customers would have to return to paper purchase orders and
the Company may experience some interruption in the placement of orders for
merchandise.
The Company has completed the remediation of its year 2000 exposure as it
pertains to internal systems, and continues to assess key customer and supplier
compliance. The internal systems include all traditional data processing
computer systems and all control, communication, and reporting equipment such as
security, telephones, and timeclocks. Because the Company has purchased all of
its critical systems (hardware and software) from third parties, it did not
incur any material costs as the updates were provided under maintenance
contracts.
The Company has initiated communications with all of its key customers
and suppliers to determine the extent to which the Company is vulnerable based
upon those third parties' failure to remediate their own year 2000 issues. The
Company is currently scheduling testing with those third parties (exchanges of
critical information such as orders, purchases, invoices, fund transfers, et
al.) and plans to complete these by June 30, 1999. Part of this process will be
to provide mutual contingency plans; however, at this time, there can be no
assurance that the systems of other companies on which the Company relies will
be converted on a timely basis and would not have material adverse effect on the
Company.
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CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Statements in the annual report on Form 10K under the caption "Management's
Discussion and Analysis of Financial Condition and Results of Operations", as
well as oral statements that may be made by the Company or by officers,
directors or employees of the Company acting on the Company's behalf, that are
not historical fact constitute "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Forward-looking statements involve
known and unknown risks and uncertainties which may cause the Company's actual
results in future periods to differ materially from forecasted results. Those
risks include a softening of retailer or consumer acceptance of the Company's
products, pricing pressures and other competitive forces, or unanticipated loss
of a major customer. In addition, the Company's business, operations and
financial condition are subject to reports and statements filed from time to
time with the Securities and Exchange Commission.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
There are no material legal proceedings to which the Company or any of
its subsidiaries was a party in the quarter ended February 28,1999.
Item 4. Submission of Matters to a Vote of Security Holders.
An annual meeting of shareholders of the Company was held on December 22,
1998. At the meeting, the shareholders approved the following:
(1) the appointment of Moss Adams LLP as the Company's independent certified
public accountants for the fiscal year ending August 31, 1999 by votes of
973,370 for, 2,306 against and 149 abstain, and
(2) the election of directors as follows:
<TABLE>
<CAPTION>
Name Votes For Withheld
- ---- --------- --------
<S> <C> <C>
Arjun C. Waney 942,032 3,763
Steven P. Wyandt 942,032 3,763
Luther A. Henderson 942,032 3,763
Eugene B. Price II 942,032 3,763
William L. Hoese 942,032 3,763
</TABLE>
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are filed herewith. Exhibit numbers refer to Item
601 of Regulation S-K:
Exhibit No. 27: Financial Data Schedule
(b) There were no reports on Form 8-K during the quarter ended February 28,
1999.
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SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned there unto duly authorized.
NITCHES, INC.
----------------------------------------
Registrant
April 9, 1999 By: /s/ STEVEN P. WYANDT
------------------------------------
Steven P. Wyandt
As Principal Financial Officer
and on behalf of the Registrant
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AND STATEMENTS OF OPERATIONS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> AUG-31-1999
<PERIOD-START> SEP-01-1998
<PERIOD-END> FEB-28-1999
<CASH> 180,000
<SECURITIES> 0
<RECEIVABLES> 777,000
<ALLOWANCES> 0
<INVENTORY> 6,435,000
<CURRENT-ASSETS> 8,606,000
<PP&E> 94,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 9,750,000
<CURRENT-LIABILITIES> 3,133,000
<BONDS> 0
0
0
<COMMON> 1,308,000
<OTHER-SE> 6,617,000
<TOTAL-LIABILITY-AND-EQUITY> 9,750,000
<SALES> 15,749,000
<TOTAL-REVENUES> 15,749,000
<CGS> 11,776,000
<TOTAL-COSTS> 11,776,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (68,000)
<INCOME-PRETAX> 669,000
<INCOME-TAX> 261,000
<INCOME-CONTINUING> 408,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 408,000
<EPS-PRIMARY> 30<F1>
<EPS-DILUTED> 30
<FN>
<F1>For Purposes Of This Exhibit, Primary Means Basic
</FN>
</TABLE>
